Kathmandu. It has suggested the Nepal Rastra Bank to make risk-based supervision effective. The Banking Sector Reform Recommendation Task Force has given this recommendation.
Nepal Rastra Bank (NRB) has been carrying out risk-based monitoring since 2014. “Overall, although the on-site and off-site systems have been effective, there have been significant weaknesses from time to time,” the task force report states, “Even after the implementation of risk-based supervision, some banks and financial institutions have encouraged to open more branches and increase loans at higher rates. If a higher rate increases quality credit, it does better for the system. Ignoring the basic standards of credit can cause problems in the financial system. ’
The task force has concluded that the problem seen today could be reduced to a great extent by stopping the misuse of current capital loan if the on-site inspection could be carried out by analyzing the concurrent as the data of the institutions is regularly sent to the off-site supervision unit. “In this regard, guidance would not have been mandatory for all banks,” the report said. ’
Here are the recommendations of the Task Force
- Only officers who have worked at the officer level of the Rastra Bank or banks and financial institutions for at least 5 years will be included in the field inspection. To impart necessary training in supervision to the newly arrived officers in the supervision departments.
- In-depth supervision of institutions and institutions that are important to the system in the third category of classifications suggested in the report.
- To be given the responsibility of supervision of banks and financial institutions on the basis of Extended Relative Declaration of the employees working under supervision. In addition, to provide supervisory responsibility of the bank or financial institution to the persons who have worked in any bank or financial institution in the past and are currently working under the supervision of the said bank or financial institution for a certain period.
- } Currently, the stress testing being done by the banks and financial institutions has determined various scenarios on the basis of the impact on the internal index of the same bank and the effect of the change on the bank has been made the scope of the study. to do.
- The Executive Director and other employees of the Supervisory Department shall not be transferred before 3 years. Also, write in the comments the concrete reason for the transfer 3 years ago.
- Job description along with annual goals of all employees including the Executive Director of the Supervision Department shall be prepared before the commencement of the financial year.
- Discuss with the supervisor every 3 months about the Job Description Along with Annual Goals and Actual Performance.
- Annual supervisor shall evaluate the performance by discussing with the concerned employee. The review committee will also discuss with the concerned supervisors and employees and give the final rating after looking at what has been evaluated more, less or appropriate. The rating will be informed to the staff. The rating will be informed to the staff. The current review committee will also add an external expert who has worked on open and transparent performance appraisal culture. Self-declaration should also be taken so that there is no bias in the performance evaluation of the employees.
- To decide on promotions, salary increments, awards, etc. on the basis of performance evaluation of employees.
- The above provisions proposed for the Department of Supervisory shall be implemented throughout the Nepal Rastra Bank as far as practicable.
- To remove the political pressure in the appointment of the Deputy Governor and to increase the confidence of the entire Rastra Bank family and the Nepali people in the Governor, a committee will be formed under the coordination of the former Governor on the basis of clear criteria.
- } It would be appropriate to have only one official trade union in the Nepal Rastra Bank like the Government of Nepal. The human resource management department will solve the real problems of the employees with priority. Arrange monthly formal meetings between the head of the official trade union and the head of the human resources department. The Governor and the Deputy Governor looking after the Human Resources Department will also be invited every 3 months. Develop a culture of work is worship by continuing efforts to eliminate nepotism, bureaucracy, sycophancy, gossip and political interference. A certain percentage of the vacant posts at the level of Deputy Director and Director should be done on the basis of studying the good practices of other countries regarding the appointment of persons from outside the Nepal Rastra Bank (through Public Service Commission).
- To draw the attention of the Board of Directors if necessary to ensure that there is no political bias in the decisions of the Chairman and members of the Board of Directors as the Nepal Rastra Bank Act has only envisioned professionalism away from political pressure.
To provide modern and high-level training and knowledge exchange in collaboration with the world’s best supervisory institutions.TAG_OPEN_li_34
In addition to annual increments based on performance, the remuneration of all employees, including the Governor, shall be reviewed every two years.TAG_OPEN_li_26
